Lotte Chemical Titan said Q2, FY18 net profit was boosted by higher sales volume, lower production costs and foreign exchange gain.
KUALA LUMPUR: Lotte Chemical Titan Holding Bhd
's earnings jumped to RM315.02mil in the second quarter ended June 30, 2018 from a year ago, boosted by higher sales volume, lower production costs and foreign exchange gain.
It announced on Tuesday net profit rose 177% from RM113.61mil a year ago. Its revenue increased by 28.1% to RM2.275b from RM1.776bil. Earnings per share were 13.86 sen from 6.58 sen.
Lotte Chemical said the higher revenue was due to the increase in sales volume which was driven by improvement in production quantity.
“Average plant utilisation improved from 71% to 82% in Q2 2018. The plants were operating at a sufficient level to maintain profit maximisation taking into consideration the need for plant general maintenance and continue to load down on Indonesia polyethylene plant,” it said.
The company said profit before tax increased by RM231.4mil, partly due to higher sales volume and lower production cost, increase of foreign exchange gain by RM39.9mil, insurance proceed receivable of RM31.2mil for gas turbine claim.
Other factors were a reduction of loss on fair value changes in total return equity swap by RM20mil from a year ago; property, plant and equipment written off as compared to RM20.1mil a year ago and increase in non-operating income.
The forex gain of RM52.2mil in Q2 2018 includes forex gain of RM80.4mil arising from revaluation of the group's US dollars IPO funds against the ringgit.
In the first half, its net profit rose 22.6% to RM559.22mil from RM455.77mil in the previous corresponding period. Revenue was 21.6% higher at RM4.489bil compared with RM3.69bil.
On the outlook, it expected oil price to be volatile and will have an impact on the price of naphtha, which is its mainfeed stock.
“In addition, there is uncertainty in the petrochemical business dynamics and regional market due to the ongoing trade war between US and China.
“Looking forward, the board would like to revise the full year 2018 operating rate to about 85% due to profit optimisation and general plant maintenance,” it said.
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